The national redress scheme is designed to run for 10 years and provide payment and support to those who have experienced institutional child sex abuse, as per a recommendation from a 2017 royal commission report.
However, many who have applied to the scheme were forced to relive their trauma before requests were rejected for unknown or unjust reasons.
Department of Social Services secretary Ray Griggs acknowledged the program's issues at a parliamentary inquiry on Wednesday.
Department of Social Services secretary Ray Griggs has apologised for the scheme's shortcomings. (Lukas Coch/AAP PHOTOS)
"We strive to be trauma-informed ... we do get it wrong," he said.
One witness, known by the pseudonym Lorraine, was sexually abused at age 13 during an institution's processing exercise when she was forced to undergo a virginity test.
During the procedure, the examiner called her disparaging names, restrained her and assaulted her, which caused excessive bleeding.
"I had silent tears coming down my face," she told the parliamentary inquiry.
"I told them it was hurting and asked them to stop, but they ignored me and continued."
Consequences of the abuse have followed Lorraine for nearly six decades.
Legitimate medical appointments leave her with lingering trauma and she lives with various mental and physical symptoms.
But when she applied for redress in 2022, her claim was rejected because her abuse was considered a "medical procedure".
"This was not a medical procedure, this was penetrative sexual abuse on a 13-year-old girl," she said.
"It's state-sanctioned rape."
Another woman, known by the pseudonym Jane, was rejected for redress even though her perpetrators were found guilty.
In her attempts to appeal the decision, she dealt with staff who were not trauma-informed.
One asked her to recount details of her trauma without warning, while others treated her with apathy.
"It's incredibly patronising and incredibly awful," she told the inquiry.
When Jane's appeal was eventually declined, she went down a mental spiral, quit her job and spent eight months dealing with the fallout.
If they could turn back time, both Lorraine and Jane said they would not have applied in the first place.
Mr Griggs has apologised to Jane and offered to have the decision revoked, though she declined.
The Department of Social Services has also launched an externally conducted investigation on her case to identify mistakes and improve future applicants' interactions with the scheme.
Those whose claims are unsuccessful are no longer cold-called, and are first notified through a text message.
Since April, applicants have been automatically provided with a list of reasons behind their eligibility decision and redress amount.
The national redress scheme has also increased its staff numbers, which has led to a 59 per cent lift in the number of determinations made every year.
"There is still more work to do," Mr Griggs said.
"I'm committed to driving continuous improvement in the redress scheme and ensuring that applicants are treated with the dignity and respect that they deserve."
1800 RESPECT (1800 737 732)
National Sexual Abuse and Redress Support Service 1800 211 028
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